Pre-Market report on 28.07.2008

[B. Karthick]

Stocks set to open lower, might recover later in the day

Jul 28, 2008


The markets are up for a subdued opening on Monday on the news of
bombings over the weekend. But we expect the pessimism to wear off
later in the day as the news flow from abroad and the divestment front
should provide a strong case against the bears. We see nearly 150 to
200 point up move in the Sensex after a lower open.

The US markets ended in positive territory on better earnings and
housing plan by the fed to bail out the mortgage firms. Crude traded
around the $123 range providing a short in the arm for the stocks. The
Asian markets opened in green on positive economic data from the US.
Nikkei had gained nearly 0.75 percent at the time of this review.

Rumours are ripe in the market that the government is willing to
dilute 10-15 percent of its PSU holdings.This should boost the share
prices of the PSU stocks listed on the exchanges. There are around 44
listed PSU stocks trading in the market. According a pink paper report
government has given a green signal to BSNL IPO and this will followed
up with a merger with MTNL. So watch out for this scrip in early
trade.

SBI came up with decent numbers, whereas ICICI disappointed with its
Q1 numbers. Tuesday will be crucial for the banking stocks ahead of
the decision on interest rates by the RBI. Midcaps and smallcaps are
set to outperform the major indices this week. KEI Industries, KS
Oils, Jain Irrigation and Sadbhav Engineering are stocks worth
watching in the midcap space. Speculative investors could take a look
ate Sita Shree foods and Pochiraju Ind for some quick gains.
Suitable stocks for intraday trading:

<LT, SBIN, TATASTEEL, DLF, SESAGOA, TATAPOWER, INDIABULLS, SUZLON,
LITL, PRAJIND>

Market Close Box:

BSE Sensex 14274.94 -502.07
NSE Nifty 4311.85 -121.70
USD Rs.42.23
Oil Nymex $123.2



B.Karthick
Research Analyst.